Stockland Cairns shopping centre at Earlville sells for $146M to Fawkner Property

A Melbourne-based asset manager has snapped up one of Cairns’ biggest shopping centres in an off-market deal.

IN an off market deal, Australian asset manager Fawkner Property has snapped up Stockland Cairns shopping centre for $146 million.

The deal was confirmed on June 30 this year and is expected to settle in the third quarter of the 2021/22 financial year.

The shopping centre, located on the Bruce Highway, has two supermarkets as anchor tenants and is a landmark holding of 111,3000 sqm.

As well as Coles and Woolworths, who between them are understood to have an annual turnover of $91 million, the centre also has three major tenants, 11 large size tenants including Rebel Sport and JB Hi-Fi and Rebel sport, as well as 97 specialty tenants and seven pad sites (such as those used by fast food operators.).

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Earlier this year, Stockland – which is Australia’s largest listed residential developer – announced it would change its portfolio by increasing its exposure to apartments over the next five years and shed $2 billion worth of retail and retirement property assets.

Stockland said the Cairns shopping centre’s strong tenancy mix is dominated by national retailers which represent 89 per cent of total centre GLA and 83 per cent of centre income.

The deal was brokered between Stockland the Melbourne-based Fawkner Property by Head of Retail Capital Markets – Pacific at CBRE Asia Pacific, Simon Rooney.

Fawkner Property’s General Manager of Funds Management Stuart Fox said the transaction was a fantastic result for both parties given Fawkner’s strict focus on Essential Service assets and community-based town centres.

“In a market that has moved a lot in recent months, we are delighted to acquire such a prominent and high performing centre that is heavily weighted towards Essential Services tenants,” he said.

CBRE Asia Pacific Head of Retail Capital Markets Pacific Simon Rooney negotiated the $146 million deal between Stockland and Fawkner Property.

“CBA have been a great partner in financing the transaction.”

Fawkner Property’s acquisition comes after Stockland had dialled back the value of its Cairns mall progressively, with industry insiders intimating that its value was written down by more than 14 per cent last year.

Stockland purchased the property in 1992 and refurbished the building in 2017.

The transaction, due to settle later this year, was agreed at the asset’s current book value and was struck on a 6.75 per cent yield.

Fawkner Property said that the shopping centre would form part of its diversified Essential Service Trust No. 17 (EST17) which will be available to investors in the first half of calendar year 2022.

The trust will take Fawkner’s assets under management to over $1.5bn in Essential Services funds offering investors consistent, reliable monthly income.

Originally published as Stockland Cairns shopping centre at Earlville sells for $146M to Fawkner Property